Two risky gambles were proposed at the beginning of chapter 14: Game 1: Win $30 with probability of 0.5 Lose $1 with probability of 0.5 Game 2: Win $2000 with probability of 0.5 Lose $1900 with probability of 0.5 How much would you pay (or have to be paid) to take part in either game?

Two risky gambles were proposed at the beginning of chapter 14: Game 1: Win $30 with probability of 0.5 Lose $1 with probability of 0.5 Game 2: Win $2000 with probability of 0.5 Lose $1900 with probability of 0.5 How much would you pay (or have to be paid) to take part in either game?

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

See similar textbooks

Related questions

Q: In roulettem, if a player uses the doubling strategy starting with a $10 bet and is betting on red…

A: Given that, Odds are one-one

Q: If a gambler rolls two dice and gets a sum of 4, he wins $10, and if he gets a sum of 11, he wins…

A: The gambler rolled two dices.

Q: A raffle offers a first prize of $1000, 2 second prizes of$300 each, and 20 third prizes of $10…

A: Given: A raffle offers a first prize of $1000, 2-second prizes of $300 each, and 20 third prizes of…

Q: In old gangster movies on TV, you often hear of "number runners" or the "numbers racket." This…

A: Number of digits = {0,1,2,3,4,5,6,7,8,9} => Total 10 digits are available,

Q: well as 0 and 00 (which are green). If you bet $14 that the outcome is an odd number, the 20…

A: a. The probability of losing the $14 is 20/38 since there are 18 odd numbers, 18 even numbers, 0 and…

Q: Imagine the two following situations. In both, you flip a coin two times. In the first, each time…

A: Whenever 2 favorable flips come $20 is won in the first game. While the 1 favorable and another…

Q: 2. Suppose you're on the Las Vegas strip, and an enthusiastic stranger approaches you asking if…

A: a. For a valid probability distribution, P(X=x) ≥ 0 and Σ P(X=x) = 1

Q: Arizona’s “Cash 4” is a 4/26 lottery. The lottery costs $1 to enter. If you match allfour numbers,…

A: Cash 4 is a 4/26 lottery, which mean 4 numbers are drawn from 26 numbers and matched with the…

Q: 4. Suppose John offers what he believes to be a fair bet as to whether an instructor will or will…

A: Given: Job believes there will be a quiz and offers a:b odds. He offers what he believes to be a…

Q: Problem 2. A player plays a game in which, during each round, he has a probability 0.45 of winning…

A: Given: Let us consider the given, During each round, the player participates in a game.He has a…

Q: A game-show spinner has these odds of stopping on particular dollar values: 55% for $5, 20% for…

A: The odds of player wining $500 is 15% and the odds of player wining $1,000 is 10%.

Q: If you randomly select a letter from the phrase "Brandon loves to eat at Red Robin," what is the…

A: We have given that the phrase "Brandon loves to eat at Red Robin," We have to find probability that…

Q: The world famous gambler from Philadelphia, Señor Rick, proposes the following game of chance: You…

A: Given Information: A fair die is rolled. If 1 is rolled, then Señor Rick pays you $20. If 2 is…

Q: A game-show spinner has these odds of stopping on particular dollar values: 45% for $5, 25% for $50,…

A: The mutually exclusive events are those which can not occur simultaneously. For example getting head…

Q: Problem 6. One card is selected from a deck. Find the probability that the card is a jack or a red…

A: Solution : We know that, The deck has 52 cards. 26 red card and 26 black card. Red cards 13 Heart…

Q: Send data to Excel Bet placed the following week Picked Crush Picked Crush Total to win to lose 43…

A: We complete the table using the given formula. It is known that, Expected frequency= (row total*…

Q: 1. Consider a game in which a coin will be flipped three times. For each occurrence of. heads, you…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: A game-show spinner has these odds of stopping on particular dollar values: 60% for $10, 20% for…

A: Given: Odds of winning $10, P(A)=60100 Odds of winning $25, P(B)=20100 Odds of winning $100,…

Q: Casino games of pure chance (e.g. craps, roulette, baccarat, and keno) always yield a "house…

A: Hi! Thanks you for the question, As per the honor code, we are allowed to answer three sub-parts at…

Q: You are given the opportunity to play two different lotteries at no cost. The first lottery is a…

A: First Lottery : Win $150 with probability 1/2 Lose $100 with probability 1/2 Second Lottery : Win…

Q: In craps, if a player bets on a 5 coming up on the next roll, and the player is paid at net 8-to-1…

A: Given, player is paid at net 8-to-1 odd The net payoff on a $20 bet is $20 * 8 = $160

Q: Find the expected value of the psychic's profit by filling in the boxes below with you answers. Use…

A: Reviewing information, PBoy=0.51P(Girl)=0.49Cost=$20If psychic is wrong, he has to pay back $20

Q: Find the outcome of the bets in roulette, given the results listed: How much must you bet on a…

A: If there is a bet of on a single number, then since it has got 35 odds against winning (35:1), if…

Q: The world famous gambler from Philadelphia, Senior Rick, proposes the following game of chance. You…

Q: in exercises 13 and 14, answer the questions designed to help understand the rationale for the…

A: Introduction: If X ~ Binomial (n, p), then the probability mass function of X is: In this case,…

Q: In the casino game of American roulette, the wheel is divided into 38 compartments numbered 1…

A: Given Information: There are 38 compartments numbered 1 through 36, 0, and 00. One-half of the…

Q: If you charge $3 to play a game of chance and the expected value is - $2, then what is the fair…

A: According to the given information, it is required to find the fair price of the game.

Q: a. In Jamalpur District, 50% of children started primary school, 70% of the children who have…

A: Given that, (a) 50% of children started primary school 70% of the children who have completed…

Q: A game-show spinner has these odds of stopping on particular dollar values: 55% for $10, 25% for…

Q: Many states and Canadian provinces have government-sponsored lotteries. Here is a simple lottery…

A: The possible three digit numbers varies from 000 to 999 making a total of 1000 numbers.Consider X be…

Question

Two risky gambles were proposed at the beginning of chapter 14:

Game 1: Win $30 with probability of 0.5

Lose $1 with probability of 0.5

Game 2: Win $2000 with probability of 0.5

Lose $1900 with probability of 0.5

How much would you pay (or have to be paid) to take part in either game?

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Given Information

VIEW

Step 2: Computing the expected value

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

c) A manufacturer is considering the production of a new and better mousetrap. She estimates the probability that the new mousetrap is successful is ¾. If it is successful, it would generate profits of $174,000. The development costs of the mousetrap are $121,000. Should the manufacturer proceed with plans for the new mousetrap? Why or why not?
two fair coins. He wins $5 if 2 heads occur, $2 if Problem#6: A player tosses 1head occurs and $1 if no heads occur. (i) Find his expected winnings. (ii) How much should he pay to play the game if it is to be fair?
Reuben is playing a game of chance in which he rolls a number cube with sides numbered from 1 to 6. The number cube is fair, so a side is rolled at random. This game is this: Reuben rolls the number cube once. He wins $1 if a 1 is rolled, $2 if a 2 is rolled, and $3 if a 3 is rolled. He loses $2.50 if a 4, 5, or 6 is rolled. (If necessary, consult a list of formulas.) (a) Find the expected value of playing the game. | dollars (b) What can Reuben expect in the long run, after playing the game many times? O Reuben can expect to gain money. He can expect to win dollars per roll. O Reuben can expect to lose money. He can expect to lose dollars per roll. O Reuben can expect to break even (neither gain nor lose money).
In a game of chance you will be given $6.00 every time you roll a 2 with a balanced die.a) What is your expected payoff?b) How much should you pay when you roll a 1,3,4,5,or 6 to make the gameequitable? A game is equitable if the mathematical expectation of a player is 0.
Charlie buys a one-year term home insurance policy for $p, that will pay $200,000 in the event of a major catastrophe and $35,000 in the event of a minor catastrophe. Charlie's home has a 0.2% chance of a major catastrophe and a 0.7% of a minor catastrophe during the one year term. What did the insurance company charge Charlie for this policy if the company expected to break even?
the carnival has come to town, and lucky louie has once again set up his pavilion. He offers a simple game consisting of rolling two normal six-sided dice at the same time for the extraordinarily low price of $3.00 per play. If the player rolls a sum of 3, the player wins $13.00; if the sum is a 9, the player wins $9.00; and if the sum is a 12, the player wins $12.00. Otherwise, the player does not win anything. How much should you expect to win or lose per game (after paying the $3.00) ?
A particular gambling game pays 4 to 1 and has a 20% chance to win. Someone will bet $10, 125 times, and keep track of the total amount won or lost. Which of the following boxes will produce the right answers? Check ALL answers that apply. a. 1 ticket labeled $10 and 4 tickets labeled -$10 b. 20 tickets labeled $10 and 80 tickets labeled -$10 c. 20 tickets labeled 1 and 80 tickets labeled 0 d. 1 ticket labeled $40 and 4 tickets labeled -$10 e. 20 tickets labeled $40 and 80 tickets labeled -$10 f. 1 ticket labeled 1 and 4 tickets labeled 0
When playing games of chance like roulette, people often say that a particular outcome is due, implying that one income is more likely because it has not happened in a while. This is fallacy because in these examples of outcome of each trial is: a. independent b. dependent c. subjective d. interrelative
Suppose it costs $29 to roll a pair of dice. You get paid 4 dollars times the sum of the numbers that appear on the dice. What is the expected payoff of the game? Is it a fair game? The expected payoff of the game is $? is it a fair game?
In the Illinois pick 3 lottery game, you pay 50 cents to select a sequence of 3 digits, such as 314. If you select the same sequence of three digits that are drawn by the organizer, then you win and collect 250$. Show all of your steps for all of the following problems: 1. How many different selections are possible and what is the probability of winning? 2. If you win, what is your net profit? if you do not win, what is your net profit? 3. Let X be the random variable representing your net profit. determine the possible values that X can take on, and the probability of each: write in distribution Table 4. Find your expected winnings-that is, find the expected value of X.